Bollinger Bands Turning Bullish for XRP Price

XRP has been cruising on a downward channel since its price peaked at around $3.38 in January this year. However, the Bollinger Bands suggest it could be due to a significant reversal.

A closely followed cryptocurrency analyst is highlighting a key Bollinger Bands pattern that could see XRP finally break out of its dull price channel this year.

Analyst Ben Gesell says that XRP has been moving in a downward channel since January, when the token peaked at around $3.38.

Earlier this April, the token’s price touched the lower band of the Bollinger Bands, which saw it rebound significantly from a sub-$2 value to almost $2.40.

On Tuesday, its pattern is hinting at another dip to that level.

“Prices touching the lower band of the technical analysis tool suggest the asset is in an oversold condition and could be due for a bullish reversal. Its course signals a potential buying opportunity for investors.”

As the Bollinger Bands lower band provides a potential point of reversal, XRP’s short-term rally could see it retest the $2.40 resistance.

If the token manages to break out of that mark and convert it into a support zone, then the price numbers could be setting up for an attempt to overcome and establish support at the $2.60 resistance toward a possible return to the $3 range.

The three-month correlation between XRP and Bitcoin (BTC) has been slipping in the past few months. Back in February, the two cryptocurrencies displayed a correlation of 0.85, but the figures have since dropped to 0.6 according to Macroaxis data.

This indicates a positive association between the assets, but they are also likely to diverge further in the foreseeable future if the trend continues.

For now, XRP will still benefit to some extent from Bitcoin’s gains, but the former is 1.63 times more volatile than the latter.

These fundamentals, combined with the earlier prediction being reinforced by the Bollinger Bands, would mean that XRP Ledger’s (XRPL) native token is once again setting itself up to out-perform Bitcoin if its trajectory keeps setting a bullish path.

Bitcoin is certainly experiencing a huge surge in institutional adoption while XRP is playing catch-up. The prime crypto asset’s control over the crypto market has gained significant traction since December last year, rising from 54% to almost 65% at present.

Without any sign of Bitcoin’s price slowing down, altcoins like XRP will remain on the sidelines. In addition, the situation will keep dampening the prospect of another altcoin season.

Narratives are important in the crypto world, and Bitcoin keeps making the headlines. So, what XRP needs is a strong catalyst to shift the market’s attention and reignite optimism in its space. In this case, the most likely spark could be the approval of the long-awaited spot XRP exchange-traded funds (ETFs) in the U.S.

The U.S. Securities and Exchange Commission’s (SEC) approval would open the door for traditional investors to gain access to XRP via traditional stock exchanges. Furthermore, the regulatory nod would legitimize the token’s status. Both of these factors would undoubtedly broaden its reach and boost its adoption. Hence, this event is one that the “XRP Army” should be keeping an eye on.

Bloomberg analysts James Seyffart and Eric Balchunas believe these new investment instruments have a high chance of approval under the current administration. Both have put the probability at 85% for a decision on spot XRP ETFs this year.